Analyst revenue estimates
For 3Q17, Spirit Airlines’ (SAVE) sales are expected to rise 21.7% year-over-year (or YoY) to $756.4 million. Sales growth is expected to fall to 18.3% YoY in 4Q17. The company is expected to post revenues of $684.3 million in 4Q17 and full-year 2017 revenue growth of 17.5% YoY to $2.7 billion.
Analyst EBITDA estimates
EBITDA margins are expected to improve for the rest of 2017. For the third quarter, analysts are expecting margins to improve to 36.4% as compared to 35% in 3Q16. For the fourth quarter, margins are expected to improve to 30.8% as compared to 29.7% in 4Q16, which will lead to EBITDA growth of 26.4% YoY in 3Q17 to $27.2 million. For 4Q17, EBITDA could grow 22.5% YoY to $210.6 million, which will lead to full-year EBITDA growth of 9.3% YoY to $861.3 million. EBITDA margins are expected to fall to 31.6% from 33.9% in 2016.
Analyst earnings estimates
Given the expected margin expansion, analysts are estimating earnings per share (or EPS) for 3Q17 to rise to 24.6% YoY to $1.55 per share. For 4Q17, EPS is expected to grow by 29.8% YoY to $1.00 per share, which will lead to full-year EPS growth of 0.6% YoY to $4.15 per share. The full-year earnings growth is lower than the growth in 1H17 thanks to the huge earnings hit in 1Q17 when EPS fell 49.5% YoY.
Investors can gain exposure to Spirit Airlines by investing in the First Trust Industrials/Producer Durables AlphaDEX Fund (FXR), which invests 1.8% of its portfolio in Spirit Airlines. FXR also invests 2% each in Delta Air Lines (DAL), United Continental (UAL), and JetBlue Airways (JBLU). Next, we’ll look at what analysts are recommending for Spirit Airlines stock.